17 Sep 2012

NZ dollar expected to rise against US

10:43 pm on 17 September 2012

A currency analyst says the New Zealand dollar is likely to trade higher against the greenback by next month after the US Federal Reserve and the European Central Bank announced more stimulus.

The kiwi reached a six-and-a-half-month high last week pushing through US83 cents after the US Federal Reserve announced a new round of quantitative easing.

The announcement came on the heels of the European Central Bank saying it would buy the bonds of European nations to help fight the debt crisis.

Westpac market strategist Imre Speizer says it was a major piece of quantitative easing, which is open ended.

He says global policy makers will be expected to provide a lot more stimulus if these measures don't work, which should be support the New Zealand dollar in the medium term and possibly longer.

Mr Speizer says the Government's tighter spending could attract more offshore investors to snap up Government bonds, which will further support the high dollar.

Early on Monday evening the New Zealand dollar was US 82.81 cents.